Mar­ket to sta­bilise: an­a­lyst

Countryman - - WOOL - Zach Relph

An an­a­lyst is bullish Aus­tralia’s wool price will sta­bilise at its cur­rent quote, de­spite tum­bling for a third con­sec­u­tive week and dip­ping below $20/kg for the first time in more than two months.

The Eastern Mar­ket In­di­ca­tor closed at $19.92 last week, 21¢ down from the pre­vi­ous week’s value, to mark the first time the com­mod­ity had traded at less than $20/kg since early Au­gust.

The fall, which also sig­nalled a $1.02 drop in wool’s value over the past three weeks, came along­side an in­creased na­tional of­fer­ing of 38,317 bales ros­tered for sale.

The EMI suf­fered a more sig­nif­i­cant cor­rec­tion in $US terms, drop­ping US51¢ to end the week at US1410¢.

De­spite the de­crease, Dyson Jones Wool Mar­ket­ing Ser­vices State man­ager Peter Howie said he ex­pected wool to sta­bilise at its cur­rent price.

“It ap­pears the price has found a new level and I think it will trade at around here now,” he said.

“The short-term price looks healthy go­ing into spring.

“While we are see­ing the lim­ited wool se­lec­tion, the mar­ket should stay healthy.”

The Aus­tralian Wool Ex­change’s lat­est re­port found it was dif­fi­cult to at­tribute the EMI de­crease to cur­rency move­ments.

AWEX se­nior mar­ket an­a­lyst and doc­u­ment au­thor Lionel Plun­kett said when viewed in $US terms the EMI had dropped US91¢ dur­ing the con­tin­ued value fall over the last three weeks.

Su­perfine types ex­pe­ri­enced the great­est losses last week, with 16.5 mi­cron wool down 90¢ to 100¢/kg.

It came as the 17 to 18 mi­cron wools de­creased be­tween 40¢ and 80¢/kg.

Against this down­ward trend, strong de­mand for medium-type wools in the 19.5 to 21.5 mi­cron range re­sulted in gains of 5¢ to 15¢/ kg. Me­cardo man­ag­ing di­rec­tor Robert Her­rmann said although the EMI suf­fered an­other loss, the Western Mar­ket In­di­ca­tor ex­pe­ri­enced growth in a pos­i­tive sign for the mar­ket.

Mr Her­rmann said the WMI spike was de­liv­ered on the back of a pos­i­tive fi­nal day of sell­ing at Fre­man­tle.

“The wool mar­ket con­tin­ued to re­trace this week with most of the falls com­ing at the be­gin­ning of the sell­ing be­fore sta­bil­is­ing to­wards the end,” he said.

“In Fre­man­tle, the mar­ket lost ground on Wed­nes­day where the WMI fell 26¢ but posted a more pos­i­tive re­sult on Thurs­day, gain­ing 17¢ to end the week at $21.32/kg.”

A re­duced of­fer­ing of 34,467 bales has been ros­tered for sale in Syd­ney, Mel­bourne and Fre­man­tle this week.

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